THE DIGITAL TIMES HAVE CHANGED, AND SO MUST OUR INSURANCE POLICIES

Apr 5, 2014

In the age of technology, Australians have a strong appetite for expensive, portable electronic devices. The majority of the population – both young and old – now own a smartphone, and tablet purchases are increasing at a rapid pace. But while we enjoy the benefits of these portable devices in both our personal and professional lives, it is plain to see that we now carry hundreds, or even thousands of dollars’ worth of technology as a matter of habit and necessity. But are these assets adequately protected in the event of theft, loss or damage? In order to protect ourselves from the unexpected financial burdens that may come with owning an expensive, portable and breakable device, many Australians need to reconsider both the scope and limits of their insurance policies.

The number of smartphones, tablets and other portable electronic devices has been rising steadily in Australia for several years. As of halfway through 2013, just over two thirds of Australians owned a smartphone. In the months since, it is likely that this figure has risen even further. Teenagers and young people are overwhelmingly tech-savvy, with many owning multiple devices and carrying them to school, work and university. And it is not just Australia’s youth living their lives with small screens in tow – working-age adults are now increasingly glued to their smartphones and tablets for both business and leisure.

The Digital Times Have Changed, And So Must Our Insurance Policies

Increased portable device ownership is a global trend, but one which Australia is currently leading the way. Our rate of ownership for smartphones is exceeded by only four other nations – the United Arab Emirates, Korea, Singapore and Norway. In the United States, the average household owns four mobile devices, a rate which could potentially be even greater in Australia, where we have a higher percentage of people owning smartphones than in either the USA or the United Kingdom.

With the iPhone 5S currently retailing at AUD$999, it is now the norm to carry more value with us every day than previous generations may have ever imagined. And gone are the days of handcuffed briefcases – our valuables are both visible and accessible, often sticking right out of our pockets.

Just as our relationship with technology has evolved in the digital age, it is apparent that our insurance needs have changed, and it is time to update our policies to reflect this shift. Australia is still considered one of the most underinsured nations in the developed world, and as the price of our everyday valuables continues to rise, the cost of remaining this way may be higher than anticipated.

The time has come to properly consider the value of the items we are carrying in our pockets and handbags every day. What is even more important is to decide whether the risk of letting these new, integral tools in our lives remain uninsured is worth it. If you wouldn’t send your child to school with a thousand dollars’ worth of uninsured jewellery in their bag, then why send them with a smartphone, tablet or laptop of equivalent – or greater – value?

By adding up the total value of the electronic devices in our homes – even after taking into account depreciation – it may be surprising just how much we are carrying in the form of these slim, portable devices. It can be troubling to realise that assets of this value are currently uninsured, but making the change for both security and peace of mind is easier than it may seem. Simply adding optional portable contents cover to your home and contents insurance policy is enough to protect these expensive devices.

The risk of carrying valuable, uninsured devices is perhaps even more pronounced for the millions of Australians travelling overseas each year. In recent time, there has been an increasing trend for consumers to request additional cover for multiple electronic devices. However, too many travellers still vote with their wallets rather than their valuables in mind when purchasing travel insurance, and many more – up to a quarter – opt out of purchasing travel insurance altogether. This can be disastrous for those who become the victims of theft, pickpocketing or other unfortunate circumstances.

The cheapest travel insurance options are often far from the best option, and unfortunately, often the only time we discover this is when we are in the worst possible circumstances. With the amount of valuable devices being carried by both backpackers and business travellers alike, it is essential to be proactive about travel insurance, and speak to your chosen insurer about caps and excesses for your valuables.

In an ideal world, no one would ever need to make a claim for lost or stolen valuables. But with $7 million worth of mobile phones lost or stolen each and every day around the world, the facts speak for themselves. Insurance, in many cases, is all too easy to dismiss when we don’t think we will need it. But it is not something we need during the good times, but rather something we cannot afford to go without during the bad. A simple reconsideration of how the value of our everyday assets has changed in recent years could be the difference between having a comprehensive insurance policy, and one with unacceptable grey areas.

Australians will continue to embrace the age of technology, but these changes to device accessibility and ownership must come with the more practical considerations of protecting our assets with comprehensive insurance policies. It is not unusual to insure our other assets, and as quickly as the rate of mobile device ownership may have snuck up on us, it’s about time we insured the rest of them.